The commodification of customer data privacy

Because customer data has itself become a product that can be bought, sold, and stolen, customer data privacy is now an essential component of every organization.

When it is transferred between businesses and online repositories or from customers to businesses themselves, customer data is particularly vulnerable. Once secured, it must only be used for the purposes that customers have agreed to, and it must not be exposed to anyone who isn’t authorized to access it.

Unfortunately, governments and businesses are still coming to terms with the real dangers of identity theft, cybercrimes, and fraud. Despite meaningful legislation being passed in Europe and California, and despite numerous task forces emerging in government security bureaus around the globe, there is still plenty of work to be done to ensure customer data is protected.

It falls to the companies that manage customer data to protect it. Most data-rich companies are proud to say that they adhere to data privacy regulations, but this is a bare minimum.

The need for more transparency has led to customer data privacy itself becoming a key point of competition. In line with customer experience, data privacy is the new battleground for customer hearts and minds.

Recovering from a Struggling Data Privacy Market

Data privacy techniques are differentiating companies like Apple and Google, who market their privacy features to customers. But these companies and others like them are still digging themselves out of a very deep hole.

Less than a year ago, trust in technology companies was at a low point. A whopping 40% of internet users in the UK and the US said they don’t trust technology companies “to lawfully manage their data,” according to a survey conducted by YouGov.

The results of the survey also indicated that Amazon was the most trusted large tech company among a list of others, but only 28% of respondents said they trusted the e-commerce behemoth. Other companies fared even worse.

(Source: ZDNet)

With massive data breaches in the headlines and cybercriminals inventing ever more subversive ways to con people out of their data, it’s no wonder that people don’t trust companies to keep them safe.

As with most problems in business, the lack of trust surrounding customer data privacy presents both a challenge and an opportunity. If trust in customer data privacy is at rock bottom, the worst thing that could happen is nothing at all. But any progress made on this front can help brands differentiate themselves and set them apart as a leader in serving customers.

Meeting Customers on Their Terms

Despite their misgivings about how their data is handled, most customers understand that brands need data to provide them with personalized experiences.

At 63%, more than half of consumers expect personalization as a standard of service, according to a RedPoint Global survey of 3,000 consumers. Personalized experiences just aren’t possible without customer data, and customers have been willing to provide at least some identifiable information in exchange for convenience and great service.

For example, a fingerprint is a particularly sensitive piece of biometric data, yet many of us have been perfectly willing to provide Apple with our thumbprint just so we can log into apps faster on our iPhones.

B2B customers want personalized experiences, too. Aside from the data they might input into a contact form; B2B buyers put plenty of data online for the world to see. You can build a B2B buyer profiles just by gleaning data from their LinkedIn profile and their interactions online. Software exists that enable businesses to automate the process by scraping data from public sources.

But it needs to be clear that this information is being collected and stored in good faith. Businesses should limit the amount of data they collect from customers, only using the data essential to their operations.

Customers should always be made aware of what data is being collected, why, and how it will be used. This information should be easy to find and understand, not obfuscated by legal jargon and fine print. Some good examples of this are the “cookie” statements businesses place on their websites under the EU’s General Data Protection Regulation (GDPR).

Finally, data must be stored in a secure environment, then erased when it is no longer being used. The customer should be made aware of what policies and protections are in place regarding the use of their data.

It should also go without saying that customer data should be kept secure through a robust and regularly updated security suite. Larger corporations may be able to keep cybersecurity in-house, but outsourcing enterprise cybersecurity is also an option for smaller companies.

Differentiating Yourself with Data Privacy

If you’re already taking steps to ensure the privacy of your customers’ data, there’s no reason to hide it from your customers. If you aren’t telling your customers the whole story about how you use their data, it’s probably time to do some introspection and internal analysis.

Companies can no longer sit on the sidelines of this debate. Data privacy is now a selling point and an important competitive element, just like customer experience. Through transparency and strong security protocols, you can ensure your customers their data is safe and join other brands that are embracing customer data privacy as a new form of leadership.